It is always better to keep your portfolio as light and as trackable as possible. That means; you should be in a position to track these stocks in terms of its fundamentals and charts. A bulky portfolio has its own set of disadvantages. There is no hard and fast rule about the number of stocks you should hold but your core investment portfolio should not cover more than 20 stocks. Anything above that is hard to manage and to track correlations. There are two reasons why we insist to keep your portfolio size limited. Firstly, your portfolio is something you should be able to monitor consistently and in detail. Monitoring your portfolio is all about consistently looking at a variety of critical factors. You need to be able to monitor industry trends, global macros, news, F&O data, volume shifts, advance declines, quarterly results, order book position etc. This kind of detailed monitoring is well-nigh impossible if your portfolio is too bulky.

The second reason is a lot more important. Ideally, your core portfolio is also supposed to offer in-built diversification of risk. That is the main purpose of having a portfolio as against having a single stick or just a few stocks. Empirical studies have proved that 13-15 stocks in any portfolio can realize the full potential of diversification. Anything beyond these many stocks leads to substitution of risk and not reduction of risk. Hence, the smaller your core portfolio the better! Of course, your trading portfolio or your opportunities portfolio can be larger at times, but your core portfolio should never be beyond these many stocks.